Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new advisor.
The easiest way to judge a mutual fund's quality over time is by analyzing its performance and fees. Our Zacks Rank of over 19,000 mutual funds has identified some of the worst of the worst mutual funds you should avoid, the funds with the highest fees and poorest long-term performance.
Below, you'll read about some of the funds included in our current list of "Mutual Fund Misfires of the Market." And if by chance you're invested in any of these misfires, we'll help and review some of our highest Zacks Ranked mutual funds.
3 Mutual Fund Misfires
Now, let's take a look at three market misfires.
Eaton (NYSE:ETN) Vance Government Obligation C (ECGOX): This fund has an expense ratio of 1.94% and a management fee of 0.65%. Without even doing any in-depth analysis, just the fact that you are paying more in fees than you're earning in returns is reason enough not to invest. ECGOX is a Government Mortgage - Short mutual fund; these funds focus on the mortgage-backed securities (MBS) market and specifially, securities that have less than three years until maturity. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
AB International Growth C (AWPCX): 2.19% expense ratio, 0.75%. AWPCX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. This fund has yearly returns of 1.55% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Oppenheimer Global Strategy Income C (OSICX): This fund has an expense ratio of 1.76% and management fee of 0.55%. OSICX is classified as a Diversified Bonds fund, which offers exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. With an annual average return of 1.34% over the last five years, the only thing absolute about this absolute return fund is that it absolutely deserves to be on our "worst offender" list.
3 Top Ranked Mutual Funds
There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.
Neuberger Berman Mid Cap Growth Adviser (NBMBX): 1.21% expense ratio and 0.9% management fee. NBMBX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. With an annual return of 10.57% over the last five years, this fund is a winner.
T. Rowe Price Cap Opportunity (PRCOX) is a stand out fund. PRCOX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With five-year annualized performance of 11.19% and expense ratio of 0.66%, this diversified fund is an attractive buy with a strong history of performance.
MFS Mass Investors Growth Stock B (MIGBX) is an attractive fund with a five-year annualized return of 12.32% and an expense ratio of just 1.47%. MIGBX is a Large Cap Growth option; these mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks.
Bottom Line
Along these lines, there you have it - if your financial guide has you put your money into any of our "Mutual Fund Misfires of the Market," there is a strong likelihood that they are either dormant at the worst possible time, inept, or (in all probability) filling their pockets with high fee commissions at the cost of your financial objectives.
Do You Know the Top 9 Retirement Investing Mistakes?
Whether you're planning to retire early or not, don't let investing mistakes derail your plans.
If you have $500,000 or more to invest and want to learn more, click the link to download our free report, 9 Retirement Mistakes that will Ruin Your Retirement.
This report will help you steer clear of the most common mistakes, like trying to time the market, lack of diversification in your portfolio, and many more. Get Your FREE Guide Now
Get Your Free (MIGBX): Fund Analysis Report
Get Your Free (OSICX): Fund Analysis Report
Get Your Free (AWPCX): Fund Analysis Report
Get Your Free (ECGOX): Fund Analysis Report
Get Your Free (PRCOX): Fund Analysis Report
Get Your Free (NBMBX): Fund Analysis Report
Original post